"Junior miners don't mine the earth, they mine the stock market" -unknown
"Fort Knox" - Placer Sluice Plant
Hardrock mining on the other hand deals with the exploration and retrieval of gold and other metals found in bedrock. This is an expensive process and can only be done profitably in large scale. However, large mining companies need to know there is a big enough source of material (gold, tungsten, copper etc.) to justify the expense of mining the area. This is where the junior companies come to play. This post will provide a brief overview of what "Junior Mining" in the Yukon is, and the general process of it.
Most junior mining companies never aim to develop a mine, instead they hope to explore a resource just to the extent where it is appealing enough for a larger mining company to buy them out then pay their stockholders the gains. Often a property will go through several owners before it is ever developed into a full scale mine.
To gain funding to explore properties, junior mining companies will often list themselves as public entities on the stock market. Investors are lured by the high risk high reward payout that juniors present when they manage to make big resource finds and either sellout to a large company, or more rarely, develop an actual mine.
For simplicity, I've divided the junior mining process into three phases: Prospecting, exploration, and "construction/marketing/selling out."
Exploration occurs in remote areas. Access to sites is often via plane or helicopter.
Prospecting:
While working on totally unexplored ground is extremely rare, it does occur. The initial phase involves research of previous work in the area, perhaps a field survey of the proposed area, and staking claims. Some "super juniors" do not even go beyond the staking process and simply aim to sell their claims on speculation alone, often to other juniors. A famous success story in this regard is Shawn Ryan.
Unlike British Columbia, claim staking requires the prospector to physically place a stake in the ground which he/she is staking. This places a bit more of a barrier of commitment when compared to "paper staking" that can be done online over a GIS program (as in British Columbia) at the click of the button and small fee to the Government. Hardrock claims are square, and for efficiency are staked 4 at once where the corners meet.
Soil Samples drying prior to being scanned by an "XRF" unit
Exploration:
Once claims have been staked, the company will attempt to raise money for an exploration program.
Exploration can range in intensity from low cost rock and soil sampling programs, to full on drilling and geophysics. Usually soil sampling is used as a method to guide where diamond drilling should take place, but also can be used as a cost effective way to improve the value of your resource.
Before ground disturbing activities can take place, the government will require some level of environmental permitting which will involve a survey by an environmental company to ensure that natural and heritage resources are not adversely impacted. If the property is on or near a First Nation traditional territory, some negotiation will also be required on this front.
A diamond drill
Diamond drilling is an expensive activity, but in the mining world is considered the only surefire way of proving a resource exists. Essentially, the company will drill into the ground and retrieve cores of bedrock which will be analysed by geologists. Once enough holes are drilled, geologists can use the magic of "math" and "rock science" to infer how much gold or other resource is in an area.
Good drill results mean investors give the company more money. Bad results mean investors will take their money elsewhere. This has resulted in some shady activities by junior companies who purposely drill in areas they know will have good results, which doesn't do much to prove a larger resource, but looks good to their investors and raises the company more money to continue exploration.
Exploration Camp
Post exploration:
Now as I mentioned at the start of the post, the aim of these junior companies is usually not to start a mine, but to be bought out by a larger company. This has a huge influence on the way the industry works. Over-drilling is a common symptom - the company may already have an idea how big their resource is, but due to investor demand to keep spending money, they will drill simply for the sake of drilling. At this point a company can be considered stagnant, and only market pressures or surprise discoveries will see changes in investor interest.
If conditions are right, a junior mining company may achieve their goal of "selling out." A large company (Goldcorp being the latest example in the territory) will buy the junior company with the aim of developing their resource into a full fledged mine or continuing exploration. The stockholders are paid for their success and the bought out company's board of directors may start the process over again elsewhere.
Other companies may aim to start a mine on their own terms. This is rare but can happen. The struggle with this approach is the junior has to raise enough market interest to fund the expensive costs of actually building and running the mine (sometimes closing in on half a billion dollars). Financing can be a solution, but the company has to be careful that capital gains produced from the mine aren't put into interest on the companies enormous loan.
"Skyvan" being loaded in Dawson City with exploration supplies
